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Dueling House Bills or Lessons in Legislating Database Protection: What are the important principles at stake?

Kathrine A. Henderson

Deg Farrelly

On March 2, 2004 the House Energy and Commerce Committee approved HR 3872, the Consumer Access to Information Act. The purpose of this legislation is to "prohibit the misappropriation of databases while ensuring consumer access to factual information”. HR 3872 is an alternative to HR 3261—the Database and Special Collections of Information Misappropriation Act. HR 3261 received a favorable recommendation from the House Judiciary Committee on January 21, 2004. The House Energy and Commerce Committee came to a different conclusion; on March 11, 2004 HR 3261 was "unfavorably reported out of committee”, essentially a non-endorsement of the bill. In other words, Energy and Commerce recommends HR 3872 while the Judiciary recommends HR 3261 as the more appropriate legislative measure for database protection.

Both bills seek to provide protection to the content of commercially produced databases. The earlier HR 3261 would provide protection by creating new intellectual property laws similar to copyright. HR 3261 establishes that databases meeting criteria specified in the act are original works of authorship and merit the same sort of protection that other classes of intellectual property enjoy. Rather than applying previously codified principles such as Fair Use to determine infringement or more aptly, misappropriation, HR 3261 creates protections, remedies, and exceptions for this class of works. Critics argue that the copyright-like protections HR 3261 extends have the potential to chill, if not outright preclude, fair use as well as electronically isolate facts. (By definition, facts are not copyrightable). HR 3872 takes a very different approach as it seeks sanctions and remedies under the auspices of the Federal Trade Commission Act (15 U.S.C. 45). The FTC would define misappropriation of a database as either "an unfair method of competition” or an unfair or deceptive act or practice in commerce” prohibited under section 5(a)(1). Both HR 3872 and HR 3261 1 offer limited liability for providers of interactive computer services. Of particular interest to CCUMC members, HR 3872 is purposefully constructed such that "the provision of this Act shall not be construed to be a law pertaining to intellectual property”. Because HR 3872 frames the problem of database piracy and its resolution as a matter of "commerce” rather than "copyright” it completely avoids the question of fair use while still protecting the contents of databases. Critics of HR 3872 disagree. They argue that this legislation is not a viable solution for database protection and that no one, including those who crafted the legislation, would actually allow it to pass the full House. Among other defects, the FTC would have limited authority to bring action against acts of misappropriation, and no one with a vested interest in database protection would be satisfied. The editors of Tech Law Journal argue that this bill does not "create a new cause of action for database developers or owners, nor preempts any existing remedies. Rather, HR 3872 simply provides that the FTC may take action against a database misappropriator [sic] as defined by the bill.” 2 Moreover, HR 3872 codifies NBA v. Motorola. In this case, the 2nd Court of Appeals held that Motorola did not misappropriate the NBA’s property when it sent real-time basketball scores and statistics to its pager customers. Proponents of HR 3261 cite this case as evidence that current laws are not sufficient to protect databases producers. It is important to restate; however, that traditionally and more importantly constitutionally, facts, including statistics are not eligible for copyright protection. The decision in NBA v. Motorola upholds this interpretation of copyright which brings us back to one of the primary criticisms of HR 3261. That is, HR 3261 has the potential to extend copyright-like protection where copyright protection is not appropriate: facts, works in the public domain, government documents, etc. For a larger discussion on the pros and cons of HR 3261 please see "Database and Special Collections of Information Misappropriation Act in The Leader. (Vol 32, No. 3). Tech Law Journal in its coverage of HR 3872 indicates that these competing acts will put the House into an uneasy position. It is possible that both bills will be presented before the Rules Committee. A second possibility is that one bill will be presented to the full House with the other as an amendment to the first. However, Rep Rick Boucher (D-VA) predicts that "given the dramatically different approach of the two bills” that "the House leadership will decide not to let either come to the House floor.” 3 This scenario is not new. Competitive legislation for database protection was introduced during the 105th and 106th Congresses as a means to stall out earlier versions of HR 3261. Proponents of HR 3261 are concerned that HR 3872 was drafted as a means to a similar end. If HR 3872 was introduced to derail HR 3261 perhaps our attention should be directed beyond the merits and flaws of these opposing bills. What are the implications for database protection? Are these dueling bills really about balancing the rights of "owners” and society or another round of quid pro quo with an inevitable expansion of intellectual property rights as part of a grander scheme? (See DMCA, Copyright Term Extension Act [Bono], etc.)

1 See H.R. 3872 § 2 Misappropriation of a Database. 2 See Bibliography under Tech Law Journal for complete citation. 3 Ibid.